I’m not saying that this particular company is trying to scam investors and I by no means am indicating that they’re doing anything illegal. I just want to educate investors on pump and dump scams and why this seems like one.
A pump and dump scam essentially involves an investor (or sometimes a group) promoting a stock like crazy and then selling it once it soars. That’s pretty much it.
If you ever get a hot stock tip or hear that something will be “the next big thing”, stay away! Yes, it’s possible to get some nice short-term gains, but you never know where the peak will be and when the bubble will burst.
Here are some of the things the report said about EMSF, in exact words.
“Get some money on the table now because this could be big!”
“Ride EMSF’s unlimited upside to what could be staggering gains!”
“2015 is a big year for EMSF… grab your position now!”
Here’s what actually happened…
I’m assuming that the report got to my house either June 3rd or 4th, during which time EMSF stock was hovering around $1.20. Then from June 5th to June 9th, the stock soared to over $2.50 – DOUBLING in value. Surely, EMSF was the next big thing!
Not so much. Since the $2.50 mark, the stock lost 25%, and the stock has been seeing pretty violent volatility swings, usually 20% or more in one day.
EMSF is now $1.91.
Moral of the story: if you receive a “hot stock tip” and have some money to blow, go ahead and invest, but be SURE to lock in your profits with a trailing stop.